I don't know if this is the one Anne Marie was thinking of, but here is a column where in part of it Yamada Sensei discusses failing people in tests.

http://usafaikidonews.com/2008/2/index.shtml
"Just like other big seminars, we had a test for black belt and I must say it was a strict one because there were other Shihan beside myself sitting at the table. Believe me, they are tougher than I am. I wasn't joking when I said the same thing before. However, I think it is good to have more than one judge at the table for many reasons.

When I give a test, I want to pass everybody but it is not always possible. I want to be a nice guy, but when there is a reason for me to be a tough guy, I am. It is my responsibility to pay respect to the value of Black Belt, and to keep a standard of good quality for Black Belt. Please understand this. When I fail you, I don't fail you alone but your teacher as well. When tests are bad, you cannot find me after the test because I hide myself in my dressing room. I feel sorry to see the people who failed their test and, more than that, I don't want to hear the complaints from their teacher, which happens occasionally, although I understand that most parents love their kids and think they are the best.

It sounds like I'm asking too much if I say this but let me tell you what I'd like to hear from both students and teachers after their unsuccessful test. From the student's side, I would feel good if they say "Sorry I embarrassed my teacher. I'll do better next time if you give me another chance," and from the teacher I'd like to hear "Sorry I have embarrassed myself. I clearly see what my student needs to do to improve.""

And another one a few years back where he talks of the role of the teacher:http://usafaikidonews.com/2005/3/index.shtml
"As far as the last tests were concerned, they were very satisfactory. One thing I'd like to point out is that if you are sending your student to test, you - as the teacher - must attend the test. If you are not there, how could you tell if your student did well or not? And also as a teacher you should know that if your student has failed you should take the blame. So, the next time you send your student to a seminar to test, make sure your student is ready so as not to embarrass yourself."